Pity the poor Treasury, which has managed to give 80% of households an extra £350 to help pay their energy bills (for this year at least) and somehow cheesed almost everyone off in the process.
The primary reason for the backlash is the mechanism for the £200 rebate going to every household this year. This will be credited to every household energy bill in October of this year, and then recouped through an extra £40 charged to bills every April for five years, when it’s hoped energy prices will be at a more normal level once more.
For long-term owner occupiers, this is innocuous enough – it might help some, and for others it just moves money around a little. But there’s no opting in or opting out – and there are some people who will lose out.
A student currently living at home with their parents who moves into their own flat in November this year will not get the £200, but will be on the hook for the £200 in repayments. An extreme case would involve a flat share of five people who pay rent on a ‘bills included’ basis – should they all then move out, their landlord gets the £200 rebate, but the tenants repay a total of £1,000.
Why, people reasonably ask, could the mechanism not be made fairer? Why must it be such a blunt instrument?
The stark and perhaps surprising answer is that attempting to do so would add far too much complexity – the state actually knows much less about us than we might imagine.
Trying to work out ways of distributing money are limited by what information the state has access to. Given we live in the age of microtargeting and the so-called database state, it’s easy to imagine that the Government knows absolutely everything about us. In theory it does: the NHS knows the intimate details of our health, HMRC has our earnings, the DWP knows which benefits we access, and so on.
The reality is that the total knowledge generated from all this data is far less than the sum of its parts. While the Government nominally knows individual incomes (albeit with a long time-lag for the self-employed), who is married to whom, and who has or doesn’t have children, even joining up these basics is beyond the ambit of departmental databases.
Many vital government databases are still on systems dating back to the 1970s, running using now-obscure coding languages almost no one still knows, and with data architecture almost no one in the departments still understands.
Making them more complex still is that layer after layer of newer tools have been built upon these creaking foundations – some for internal systems, some for online services, and so on – creating more interactions, uncertainty, and complexity. The simple and obvious idea of joining together government data to inform policy-making and to target help ends up being a task of Herculean proportions.
The results of this sclerosis make themselves felt often, particularly when it comes to tax and benefits: Rolling out Universal Credit, which involved syncing up HMRC and Department for Work and Pensions databases, took far longer than anyone imagined. Maternity and paternity pay was hit with nearly a year of delays for unlucky families. And thousands of families know all-too-well how long even the most basic of HMRC mistakes can take to rectify.
Trying to work out how to target interventions like furlough, or help for energy bills, is just one of many government interventions left to be managed by proxy as a result of the data-poor state.
These efforts are made more difficult by political choices made by ministers: one obvious, easy and immediate way to target help to struggling households would be to use Universal Credit – but having been burned by the political difficulty of reversing a temporary rise in Universal Credit, the Chancellor appears to have ruled out using it for the energy crisis.
Similarly, the simple option of using the tax system to direct some extra funds to basic rate taxpayers was ruled out. That left the £200 rebate for everyone, which was delegated to the energy companies to administer, with as little complexity as possible. It also left an extra £150 to be allocated, the Government said, to all but the richest 20% of households.
The data used to determine that seems, on the surface of it, to be quite straightforward: it just uses council tax bands, and takes the form of a discount on the bill for those in bands A-D. In a country in which council tax bands had any basis in reality or sanity, this would be a perfectly acceptable system – but this is not the UK’s reality.
The political difficulty (nay, impossibility) of updating the UK’s council tax bands means that bandings are still based on property values as of 1991. For properties built since then – i.e. in the last thirty years – an imaginary 1991 valuation is created and used to determine council tax bands.
Results are predictably erratic. Take, for instance, the rented flat in which I live in North London, which is probably worth half a million or more. It is in council tax band B. The flat in West Yorkshire in which my mother lives is probably worth at most a third of my London flat – and yet is band E. Thanks to the vagaries of council tax, the ‘levelling up’ government will be giving extra cash to Londoners versus those in the north. Again.
A toxic combination of political cowardice, under-investment, lack of understanding and data being the top of no-one’s priority list means the Government collects humungous amount of data that then just sits there, unused – making targeted interventions difficult, trends impossible to spot, and investment and spending decisions woefully under-informed.
This ties into a wider problem facing the administration of government. So entrenched is the civil service’s closed culture – an outright culture of secrecy – that the introduction of Freedom of Information laws has discouraged updating and improvement of government data, lest it be more easily and extensively accessed by citizens.
A post-it note culture has moved into the digital age with government by WhatsApp. Just as it’s failing to use its data properly, central government is quite literally losing its institutional memory. That will mean more mistakes, and even worse, more repeated mistakes.
Ironically, there was one (and so far only one) person who understood the UK was anything but a database state and who wanted to fix that: none other than Dominic Cummings. Sadly for data advocates, Cummings flamed out long before he could do anything to address a problem this entrenched. Advocates of good government are left to hope that the next person to take the UK’s data poverty seriously lasts slightly longer in office.
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